How to Open an Arcade Business
I ran an arcade for years, listen to me.
In a Nutshell, Don't.
Why are you still there? I told you not to open an arcade.
Really. I’m not kidding.
So, you’re still interested? Go visit a major theme park, a Family Entertainment Center with go-karts, mini-golf and such, and a Chuck E. Cheese’s. Ok, now go visit a Dave and Buster’s.
You’re still interested? Ok, well, I guess I can tell you how it works.
What Games Make Money? Find Out!
Research Which Games Make Money
Step 1: Subscribe to RePlay, Play Meter, and Vending Times Magazines. Keep an eye on what’s making money. Look in the back or at those online ads. What are games going for? Really, you thought they’d be $50 like that Tetris game you picked up at an auction last year? Nope. What’s the upper range for a game? Well, that big Wizard of Oz coin pusher that Elaut makes is $50,000. Why yes, you could have bought a car for that much money.
Prizes Drive Play. Period. Dot.
Make a Rough Budget for Games
Step 2: Make a list of what games are in those top earnings polls. Pencil in what they’re going for used. Check and see what they’re bringing new. Put it all together and add 20%. That’s what you’ll need to get the games in, keep some common spare parts, and what-not.
Rotate Games Regularly!
Explore the Game Auctions Options
Step 3: Start looking for game auctions. American Amusement Auctions, Super Auctions, and Michael Angelo Auctions are three of the ones that I’ve bought from. There are more out there, but I’ve never dealt with them. Visit a few of the auctions, see what the games are going for, and add $300 per game for repairs. Most of the time games are being sold at an auction because there’s a problem that their owners can’t find or repair. It’s not always true. A lot of the time they may just be older games, but they probably need the $300 spent on graphics replacement, anyway.
Parties Drive Business.
Find an Arcade and Evaluate it.
Step 4: Go look at an arcade. Can’t find one? Look some more? Really, you can only find one or two? What are their strong points? Generally they’re located next to theaters. That’s the strong point. What kind work? The kind like Chuck E. Cheese has where you vend tickets and trade them in for prizes work. That’s pretty much the whole list of games that make money. Nope, it ain’t all Defender and Donkey Kong anymore.
Food, Housing, Transportation: Add Food to the Mix
Step 5: What do people need? A place to live, a car to get them to work, and food to eat. Where does your arcade fall into this scheme? Nowhere? Ok, add some food. A short menu—pizza and sandwiches is the place to start. Start pricing used kitchen equipment. Add that to the list.
Attend a Foundation's Entertainment University
Step 6: Go to a Foundation’s Entertainment University. Frank Seninsky and the other presenters will teach you a thing or two about how a Family Entertainment Center works. Arcade plus food doesn’t quite make it to that level. Ponder some more: can you really make it work?
Go Real Estate Shopping
Step 7: Start looking at space. You need a place with enough room for games, a prize redemption area, several party rooms, a kitchen, a small dining area, and that is ADA compliant. I’d say you need 8,000 square feet minimum. You need it in a good location, not run down, not out of the way. High traffic, high income, high earnings potential…high rent. It isn’t pretty.
Are Franchises an Option for You?
Step 8: Look at what you’ve got on paper. Now consider some franchise options. Putt-Putt is offering franchises again. Chuck E. Cheese is doing the same. Mr. Gatti’s, Peter Piper Pizza, Incredible Pizza…the list goes on. It might work better for you. It will definitely be easier to put together with some rough plans. Franchises don’t want you to fail.
I Sell Toys for Toy Network, Call Me!
Call Me, I Sell Redemption Toys
Step 9: You’re still here? Ok, well what I do for a living is sell toys to Amusement Parks, Carnivals, Arcades, FECs, and the like, give me a call. If you’ve made it this far, you’ll need a good idea of how to stock a redemption prize center and how to price the items.
Don't Do it Until You Understand What You're Doing. Period.
Really, I worked as a consultant for a while after I closed my arcade. My general advice was not to open projects. If I don’t see them as feasible, I’ll tell you so. Of the two projects I know that continued after I told them they shouldn’t, one told me that their only business comes on the weekends when birthday parties come in. The other is selling and repairing games to generate a large part of their income. It’s not the arcade that’s making money, it’s the ancillary businesses.